Massachusetts Gov. Deval Patrick, right, faces reporters and Secretary of Administration and Finance Jay Gonzalez, left, looks on during a press conference in January when the governor released the state budget for this fiscal year.Associated Press file / Steven Senn

BOSTON - Gov. Deval L. Patrick on Tuesday unveiled a $540 million plan to close a budget shortfall this fiscal year including $225 million in total spending reductions to the executive branch and the use of $200 million from the rainy day fund.

Patrick's $225 million in emergency reductions from this year's $32.5 billion state budget include reductions from dozens of state programs including those that serve the elderly, the mentally ill and the poor. Some cuts include $5.2 million from $11.3 million for communities such as Chicopee, Holyoke and Springfield to bus homeless students, money for regional school transportation aid and special education. Those emergency cuts do not require legislative approval.

Patrick will ask the state Legislature to vote to support 1 percent, or $9 million, cut in some $900 million in unrestricted local aid for all cities and towns this fiscal year. The proposed cut in local aid seems tiny, but in Chicopee it would amount to $100,000 and in Springfield about $320,000. Patrick also is asking legislators to give him the authority to make further emergency cuts in local aid this fiscal year to give him flexibility if the state budget problems worsen.

"We are all in this together," the governor said at a Statehouse press conference. "This is about making sure everybody contributes."

Patrick said that even with the cuts, virtually all affected programs and services will still receive at least the same level of funds as the prior year.

The governor's plan includes a provision that if profits from the state Lottery exceed expectations of $1.026 billion for this fiscal year, then the excess proceeds would be used to increase unrestricted local aid.

Patrick said his administration is eliminating plans to hire people for 700 new positions approved in the budget this year when the economy was stronger, providing savings of $20 million.

Patrick is also seeking to save $25 million by asking the state Legislature to approve a bill that would allow leaders of the courts, other constitutional offices and non-executive departments to impose their own 1 percent cuts, or 1 percent would be reduced from each of the line items under the offices and departments.

Sen. Stephen M. Brewer, a Barre Democrat and chairman of the Senate Ways and Means Committee, said he did not believe that legislators would approve Patrick's request for $9 million cut in unrestricted local aid. "At this point in time, I don't see us wanting to do that," Brewer said.

Brewer said Patrick's $225 million in emergency cuts will be felt across the state.

"You can't do this exercise without having a lot of pain," Brewer said.

Brewer said he would support use of rainy day money and 1 percent cuts to constitutional offices and non-executive departments.

The $5 million cut in busing transient homeless students within and between school districts would mean some serious reductions for Holyoke, Chicopee and Springfield. The cities would see about 50 percent cuts from their grants of $311,000, $431,000 and $563,000 respectively.

Some of the state's highest yearly costs for busing homeless students are in Western Massachusetts. About 10 percent of the student population is homeless in Holyoke.

Patrick said he would not reduce $4.17 billion in Chapter 70 general education aid, which is $180 million higher than the prior fiscal year.

Even with the $200 million draw, the rainy day fund would have $1.2 billion, one of the highest in the country, Patrick said. Legislators would need to approve the use of that money.

Patrick said the emergency cuts became necessary after the state Department of Revenue reported tax collections on Tuesday for November and for the first five months of this fiscal year.

The revenue department said that tax collections for November totaled $1.418 billion - $21 million better than projected and $55 million more than last year. Tax collections for the fiscal year so far, however, are $7.9 billion, up $23 million from the same period the last fiscal year but $235 million below projections.

Because of the trend, Patrick said he reduced $515 million from the state's estimate for collection of taxes this fiscal year, bringing the estimate to $21.496 billion. The tax collections help finance the state budget.

Patrick said the cuts were serious but no reason to panic.

"Cutting budgets is no abstract exercise," he said. "I know and see the people these decisions affect."

Patrick said the state's economy was slowed by the uncertainty surrounding negotiations in Washington to avoid the so-called "fiscal cliff," a combination of increases in taxes and automatic spending cuts that take effect on Jan. 1 unless the president and Congress reach a compromise on reducing the federal budget deficit.

In a sign that the state budget crunch is modest for now, Jay Gonzalez, secretary of administration and finance, said that the administration will release $20 million in pay increases for low-paid care workers for private, nonprofit human-service agencies that contract with the state.

Gonzalez said that if Congress and the president fail to reach a deal and tax increases and automatic spending cuts take effect, then the state's economy will slow and state government would lose an additional $300 million in tax collections this fiscal year and up to $1 billion reduction in tax collections for the fiscal year starting July 1.

The state would also lose $200 million in federal funding including subsidies for child care, special education, block grants for communities and heating assistance for the low-income.

Emergency cuts

Here are some emergency cuts by the governor:

• $2.5 million from $3.5 million for a special fund to help school districts shortchanged by the formula to distribute general education aid.

•$5 million from $11.3 million to reimburse school districts for busing homeless students.

• $1 million from $44.5 million for regional school transportation aid.

• $11.5 million from $242 million for schools to pay for extraordinary costs of special education.

• $15.1 million from $318 million in rate payments to nursing homes for patients on Medicaid.

• $26.8 million from $1.95 billion in fee-for-service payments to hospitals for Medicaid patients.